AS PRESIDENT Jiang Zemin wraps up his trip to Germany, motor industry executives there are fearful plans to secure a firm grip on China's apparently booming market are beginning to run into difficulties.
Problems with mainland partners, reports of interference by gangsters, and disappointment at a lower than expected level of sales have dampened their hopes. Whatever may be said in public, the feeling is very different to the euphoria of Mr Jiang's ground-breaking visit to Germany in 1995, when multibillion-dollar projects were signed.
The concerns of German companies highlight deep-rooted problems with China's motor industry. Demand has fallen short of expectations, and a drive along the mainland's magnificent new motorways reveals most of them are empty.
While Volkswagen has been successful, gaining a dominant share of the market, industry sources say the company will have complained about the actions of its partner, the Shanghai Automotive Industry Corporation (SAIC), in helping a manufacturer in Wuhu to build a model, the Charade, that will compete with its own Jetta.
Volkswagen's sales and profits in China have already slumped, partly because it, like others, overestimated the market's size.
The company's irritation with its partners began when SAIC formed a partnership with General Motors to build a rival factory in Shanghai. President Jiang's arrival in Germany on Monday came at the same time as an article in the country's Stern magazine highlighting troubles at his hometown in Yanzhou, Jiangsu. This is where, in 1995, the German company Daimler agreed to open up a bus factory with a Chinese partner, Yaxing Bus Company.
